The US Bankruptcy Court for the Eastern District of Virginia, Richmond Division, has approved Intelsat’s reorganisation plan, marking what the satellite operator described as the final court milestone in its financial restructuring process.
Intelsat said it is poised to emerge from the process in early 2022 upon receipt of regulatory approvals, completion of certain corporate actions, and satisfaction of other conditions.
The satellite operator said that the plan would reduce its debt by more than half – from approximately US$16 billion to US$7 billion – and position the company for long-term success.
The plan was supported by all creditor groups across Intelsat’s capital structure following extensive negotiations and the ultimate consensual resolution of a multitude of complex issues.
The company said that the plan will see it delisted and emerge as a private company, with the support of new equity owners, access to US$7.875 billion in capital, and a deleveraged balance sheet. The company should be able to reduce its debt further when it receives US$4.87 billion of relocation payments in connection with the C-band spectrum clearing project, with US$1.2 billion of the total already approved by the Federal Communications Commission for anticipated receipt in January.
CEO Stephen Spengler said that the company would focus on building the world’s first global 5G satellite-based, software-defined, unified network as a key goal.
“Today’s plan confirmation is a key milestone in Intelsat’s transformation. We have achieved all of the goals we identified at the outset of the process, including a substantial reduction of our legacy debt burden,” said Spengler.
“Throughout the process, we have driven our business forward at full speed – launching new satellites, advancing the accelerated clearing of C-band spectrum, acquiring Gogo’s commercial aviation business, progressing our next generation network and service strategy, and serving customers every day with the excellence for which we are known. We greatly appreciate the dedication and contributions of our employees, the support of our valued customers, vendors, and other partners, and the collaboration with our financial stakeholders as we pave the way for future innovation and growth.”
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